Paving the way towards predistribution: a study on the introduction of a land value tax

Jesús Olea (), David Hoyos () and Javier García-Enríquez ()
Additional contact information
Jesús Olea: University of the Basque Country UPV/EHU
David Hoyos: University of the Basque Country UPV/EHU
Javier García-Enríquez: University of the Basque Country UPV/EHU

The Annals of Regional Science, 2025, vol. 74, issue 1, No 30, 26 pages

Abstract: Abstract This paper explores the potentiality of implementing a land value tax (LVT) aimed at displacing the existing taxes on real estate and partially the taxes on personal income as a first step towards the implementation of an ecological tax reform. The LVT is simulated in the context of Bizkaia, a Spanish province with fiscal autonomy. A hedonic price model allowing for spatial correlation is used to estimate the tax base and collection capacity. Following Lyons’ (2012) approach, we set as a collection objective the amount derived from the shift of all taxes on real estate and the income tax returns of nearly 75% of the population representing the lowest taxable bases and calculate the average tax per square metre for the whole territory. Then, the proposed LVT is applied proportionally to the site value for each property according to different zones. We find that a proportional rate of 1.05% on the land value would be sufficient in order to carry out the proposed tax displacement. Our findings suggest that focusing tax systems on the predistribution of income rather than on its redistribution may well set fiscal policy on the path towards a sustainable and fair economy.

JEL-codes: C21 H20 H31 Q51 (search for similar items in EconPapers)
Date: 2025
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s00168-024-01353-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:anresc:v:74:y:2025:i:1:d:10.1007_s00168-024-01353-3

Ordering information: This journal article can be ordered from
http://link.springer.com/journal/168

DOI: 10.1007/s00168-024-01353-3

Access Statistics for this article

The Annals of Regional Science is currently edited by Martin Andersson, E. Kim and Janet E. Kohlhase

More articles in The Annals of Regional Science from Springer, Western Regional Science Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().